Sectoral financing of political parties in the amount of nearly $13M - The Chief Electoral Officer discloses practices of an even greater scope than already revealed

April 3, 2013

Quebec City,April 3, 2013– In the current context of the work of the Charbonneau Commission, the Chief Electoral Officer of Québec, Jacques Drouin, is releasing the results of audits uncovering sectoral financing practices more widespread than revealed to date, benefiting some of Québec’s provincial and municipal political parties.

“Sectoral financing” enables a number of electors associated with the same company or business group to contribute to a political party. This seemingly legitimate practice may be intimately linked to the use of straw men. Audits were undertaken last year following the conclusion of an agreement between the office of the Chief Electoral Officer (DGEQ) and the Agence de revenu du Québec (ARQ). The audits determined that between 2006 and 2011, the employees of 532 companies linked to four business groups (offices of lawyers and accountants, construction firms, and the engineering-consulting sector) along with individuals connected with these  employees, contributed $12.8M  to various political parties. A special investigation unit (SIU) recently constituted by DGEQ has been empowered to follow up on this auditing work and in so doing to support the process designed to bring offenders before the courts, whenever appropriate.  

“This is just the sort of information that enables us to launch investigations and eventually to initiate proceedings,” Mr. Drouin indicated. “The fact of having sketched a groundbreaking portrait of sectoral financing is already a major step forward, paving the way for more effective interventions in the area of prevention, detection, and punishment of illegal financing,” the Chief Electoral Officer specified.

DGEQ’s audits have been initiated in the wake of the report prepared by the anti-collusion unit directed by Jacques Duchesneau. The report was released in November 2011 and contained information concerning illegal financing of political parties.

The challenge: establishing a link between contributors and their employers

The main difficulty when it comes to proving that companies are practicing sectoral financing is to identify firms where a significant percentage of employees are also contributors to political parties. Research can be carried out based on public information concerning a restricted sampling of firms, but data cross-checking cannot always determine the precise identity of individuals having made political contributions or the extent of sectoral-financing practices. During its auditing process, DGEQ prioritized systematic research based on databases that it put together, encompassing 100,000 contributions and a file containing 730 carefully selected companies. Thanks to the agreement with the ARQ, the results obtained are reliable and the cross-checked data, abundant. It should be recalled that the political-financing reform adopted by the National Assembly at the end of 2010 made this collaboration possible.

In fact, the contributions file assembles the names of individuals having contributed $400 or more to provincial parties or $140 or more to municipal parties between 2006 and 2011. The “contributions” and “business groups” files were forwarded to the ARQ, which was able to confirm a clear fiscal link between contributors and companies for 532 out of 730 firms. The business groups file breaks down as follows:

Type of firm

Total examined

With sect. fin.

Accounting firm

8

8

Lawyers’ office

18

18

Consulting-engineering firm and linked firms

249

205

Construction company (roadwork)

455

301

Total

730

532

Nearly $13M in sectoral financing 

Based on information confirmed by the ARQ, DGEQ was able to determine that a significant number of employees of targeted companies contributed approximately $10M to provincial political parties and about $1.2M to municipal parties between 2006 and 2011. Nearly 83 percent of contributions made at the provincial level involved sums of $1,000 or more. According to the figures compiled, consulting-engineering firms were the most generous contributors:

Consulting-engineering

1,675 contributors

3,991 contributions

$5.99M

53.3%

Construction

    768       ‘’

 2,594        ‘’           

$2.9M

25.9%

Accountants

    708       ‘’

 1,681        ‘’

$1.38M

12.3%

Lawyers

     446      ‘’

 1,142        ‘’

$0.95M

8.5%

 Employee contributions to political parties were distributed as follows:

Parti libéral du Québec

$7.3M

72.4%

Parti québécois

$2.0M

19.3%

ADQ (now CAQ)

$0.8M

8.2%

In addition to contributions by employees from audited firms, DGEQ was also able to track down $1.6M in contributions coming from individuals connected to them. Information cross-checking revealed, in particular, a number of cases where more than one contributor shared the same address.

On the municipal front, two parties from theMontrealregion were the greatest beneficiaries of sectoral financing:

Union Montréal

$296,535

25%

PRO des Lavallois

$318,450

26%

Other parties

$588,085

49%

A significant decline in sectoral financing as of 2009

DGEQ’s audits also revealed that sectoral financing significantly declined as of 2009. In fact, 73.3 percent of all sectoral-financing contributions to provincial parties were made between 2006 and 2008. Compared to total sectoral-financing contributions in 2008, the 2009 total was down by 40 percent, the 2010 total by 75 percent, and the 2011 total by 84 percent. At the municipal level, 60.2 percent of all sectoral financing was accounted for during the two years preceding the general elections of November 2009.

 

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Categories : Provincial, Municipal, Municipal financing, Provincial financing, DGE